December 2, 2009—Energy consumption in both old and new Canadian buildings can be cut by an estimated 30 to 50 percent while producing a favorable return on investments, according to Climate Change: Risks & Opportunities in the Canadian Commercial Real Estate Market, a report produced by KPMG LLP, the Canadian member firm affiliated with KPMG International.
KPMG notes that commercial buildings are a major source of both direct and indirect greenhouse gas (GHG) emissions, and points out that business advantages of going green include easier facility zoning and permitting, reduced tax burdens, and potentially lower insurance premiums, in addition to the knowledge that going green is good for the planet.
KPMG also reminds Canadian commercial real estate groups that a Canadian national market for carbon offsets related to building efficiency is on the horizon. Before this happens, KPMG says that companies should have long-term real estate agreements in place addressing development, ownership, and sale of all environmental attributes accrued from their commercial property.
Having a clear carbon management strategy should be part of any large commercial real estate holding, asserts KPMG. This strategy starts with assessing the GHG emissions related to the entire portfolio (knowing the carbon footprint). Gathering GHG information should follow a well-constructed GHG information management plan consisting of: Organizational and Operational Boundary Conditions; GHG Qualification Process, Procedures and Methods; Data Quality Control and Management; Ongoing Roles and Responsibilities; and Auditing and Verification.
The report explores the reasons why there has been little progress in wide-scale adoption of energy-efficiency improvements, especially retrofits to existing building, despite years of government and utility-sponsored grants and incentive programs, as well as energy audits indicating favorable returns on investments.
KPMG believes that increased pressure from investors, regulators and anchor tenants on commercial real estate entities will result in more “green” buildings, and encourages CRE entities to have a clear carbon management strategy and not to miss the opportunities related to drastic changes in regulations and public perceptions.
